Half-year Report

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN INCOME & GROWTH INVESTMENT TRUST PLC

UNAUDITED HALF YEAR RESULTS FOR THE SIX MONTHS ENDED31ST JULY 2016

Chairman's Statement

This is the last half year report and accounts of the Company's life, before we are wound up at the end of November, in accordance with our Articles of Association.

Financial markets made good progress over the six months to 31st July, propelled by the combination of moderate growth and monetary laxity. Central banks in Japan and Europe continued to add monetary fuel to the global financial engine, whilst the Federal Reserve abstained from further tightening. The Bank of England cut interest rates by 0.25% and announced further purchases of assets with newly created money. The FTSE 350 (the Company's benchmark) returned 11.9%.

After six straight years of outperformance, the Managers had a difficult half year. The shareholders' funds total return was still positive at 6.9%, but this was some 5% below the benchmark. As we promised shareholders, we remained fully invested in anticipation of our wind-up. Gearing added value; the non-UK equity portfolio beat the benchmark; but the UK equity portion - some 70% of assets - fell sharply behind the index.

The Manager's Report explains the causes of this performance in greater detail. The period under review includes the immediate impact of Britain's decision to leave the EU. This led to relative weakness of UK-oriented companies, to which we have significant exposure. These companies had previously led our strong performance since 2009. We are relatively underexposed to the largest multinationals that benefited from sterling's depreciation in the wake of the vote.

The Board increased the quarterly dividend to 1.2p per Income share in the previous financial year, largely reflecting the strength of dividends paid by UK companies.

It is the Board's intention to remain fully invested over the next several months. We have announced already that shares in another investment trust, JPMorgan Elect plc will be offered to shareholders preferring to retain uninterrupted exposure to markets and not to crystallise capital gains by receiving cash. We intend to write again in anticipation of an Extraordinary General Meeting to authorise the winding-up of the Company.

Karl Sternberg

Chairman

29th September 2016

Investment Managers' Report

Market Review

Global equity markets performed positively over the period under review as economic data showed global growth to be on track. The vote to leave the EU came as a shock towards the end of the second quarter, as market participants assigned a high probability for a 'remain' vote. Given the immediate downgrade in the UK's perceived near-term growth prospects, as well as the rise in uncertainty facing the global economy as a whole, equity markets sold off significantly and bond prices rose in the immediate aftermath. However, markets stabilised within a few days and performed well in July and August as equities and corporate bonds rose strongly.

In anticipation of the economic effects of the Brexit shock, the Bank of England reduced interest rates in August renewed its asset purchase programme. Elsewhere the effects of Brexit appear to be limited with the euro area Purchasing Managers Index remaining at a level suggestive of satisfactory growth.

Portfolio Review

The Income & Growth portfolio is managed to the objective of meeting the final capital entitlement of the Income shareholders, as well as providing them with a regular income, and of providing capital growth for the Capital shareholders.

The Company's overall portfolio return of +6.9% underperformed the benchmark's return of +11.9% over the six months to the end of July 2016. There was positive absolute performance from all underlying strategies. Our UK equity holdings which make up our biggest allocation delivered a positive absolute return during the period, but underperformed the FTSE 350 index by 7.1%.

This disappointing performance of the UK equity element of the portfolio was a result of the portfolio's overweight position in stocks exposed to the domestic economy such as house builders, retailers and media companies. The negative impact attributable to these three sectors alone was in the region of 3.7%. It resulted from a fear that these sectors will experience a greater impact from any post 'Brexit' slow-down than sectors whose business is mainly conducted overseas.

Looking at specific holdings in the portfolio the worst performers were Berkeley Group, a house builder with a large London exposure; Next Plc, the high street retailer and ITV, for whom advertising is a key source of revenue. Conversely our internationally-exposed holdings such as British American Tobacco, Rio Tinto and GlaxoSmithKline performed strongly.

In periods of such volatility it is imperative to continue to assess the portfolio's holdings to ensure that the rationale behind the original investment decision still holds. For the vast majority of holdings this was the case and as a result few changes were made to the portfolio. Whilst we acknowledge the fact that economic uncertainty has risen we see little to be gained from selling holdings where the underlying business case remains strong and where the message from the management teams remains one of guarded optimism.

During the review period we have made no changes to our asset allocation. The largest allocation is UK equities. We also own 11% in JPM Multi-Asset Income Fund. It remains important that we have diversified sources of income and exposure to attractive asset classes to help meet the Fund's dual income and growth objectives.

We have a 4% allocation to JPM Europe Strategic Dividend Fund, which delivered a positive absolute performance in sterling terms during the first six months. Within the fund the largest contributor to relative returns at the sector level was stock selection in Food, Beverage & Tobacco whilst underweight positions in the resources and mining sectors damaged returns as commodity prices rose.

The JPM Global High Yield Bond Fund, which represents 9% of the trust, also produced a positive return over the period. Within this fund, issuers in the telecommunications and consumer sectors performed well whilst underweight positions in mining, energy and utility sectors hurt performance.

Outlook

We expect the dovish stance from the Federal Reserve to continue, supporting a continued expansion of the US economy, albeit with a modest pace of growth. Globally, we see that some of the downside risks have moderated and China in particular has stabilised, increasing our confidence in the global economic outlook. Whilst we hold positive views on both equities and corporate bonds, we expect returns from these assets to be modest. In a world where rates continue to remain low and monetary policy relatively easy we continue to see support for assets with a yield, whether in the form of a dividend yield or a coupon.

Although these same global influences will be supportive of UK equities which are relatively high yielding, they remain exposed to the potential impact of Brexit. Current economic indicators suggest investors' worst fears may have been misplaced but confidence remains fragile as markets, corporates and consumers await further clarification on the UK's exit from the EU.

Given the Company's short life until its reconstruction at the end of November we envisage keeping the portfolio fully invested.

James Elliot

Katy Thorneycroft

Sarah Emly

John Baker

Investment Managers

29th September 2016

Interim Management Report

The Company is required to make the following disclosures in its half year report:

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company fall into the following broad categories: investment and strategy; market; accounting, legal and regulatory; corporate governance and shareholder relations; operational; and financial. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 31st January 2016.

Related Party Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i) the condensed set of financial statements contained within the half year financial report has been prepared in accordance with FRS 104 'Interim Financial Reporting'; and

(ii) the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;

and the Directors confirm that they have done so.

For and on behalf of the Board

Karl Sternberg

Chairman

29th September 2016

Statement of Comprehensive Incomefor the six months ended 31st July 2016

1 Dividends paid during the six months ended 31st July 2016 of 2.4p (2015: 2.3p) per Income share, amounting to £1,482,000 (2015: £1,420,000).

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by The Association of Investment Companies.

Statement of Changes in Equityfor the six months ended 31st July 2016

Statement of Financial Positionat 31st July 2016

Statement of Cash Flowsfor the six months ended 31st July 2016

Notes to the Financial Statements 

for the six months ended 31st July 2016

1. Financial statements

The information contained within the financial statements in this half year report has not been audited or reviewed by the Company's auditors.

The figures and financial information for the year ended 31st January 2016 are extracted from the latest published financial statements of the Company and do not constitute statutory accounts for that year. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

2. Accounting policies

The financial statements are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in November 2014.

FRS 104, 'Interim Financial Reporting', issued by the Financial Reporting Council ('FRC') in March 2015 has been applied in preparing this condensed set of financial statements for the six months ended 31st July 2016.

The Company has a fixed life and will be wound up voluntarily on or around 30th November 2016. Therefore, these half year financial statements have been prepared under the 'break-up' basis. Fixed assets have been reclassified as current assets. The market value for investments is deemed to be a proxy for recoverable value. Creditors falling due after more than one year have been reclassified as current liabilities.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financial statements for the year ended 31st January 2016.

In March 2016, the FRC published amendments to FRS 102 concerning fair value hierarchy disclosures. These amendments are effective for accounting periods beginning on or after 1st January 2017. The Company has elected to adopt these amendments early in these interim financial statements. Full disclosure is given in note 7.

3. Dividends on Income shares

A second quarterly dividend of 1.20p (2015: 1.20p) per Income share, amounting to £741,000 (2015: £741,000) has been declared payable in respect of the six months ended 31st July 2016. It will be paid on 23rd September 2016 to shareholders on the register at the close of business on the 25th August 2016.

4. Return per class of share

5. Net asset value per class of share

6. Reconciliation of net return on ordinary activities before finance costs and taxation to net cash outflow from operations before dividends and interest

7. Fair valuation of financial instruments

The fair value hierarchy analysis for financial instruments held at fair value at the period end is as follows:

1 Represents investments in mutual funds and interest rate swaps.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

JPMORGAN FUNDS LIMITED

29th September 2016

For further information please contact:

Divya Amin

For and on behalf of

JPMorgan Funds Limited, Secretary

020 7742 4000

ENDS

A copy of the half year will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM 

The Half Year will also shortly be available on the Company's website at www.jpmincomeandgrowth.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.